Bid for Sara Lee Could Come as Early as Friday

Kayla Tausche |CNBC Reporter

Wednesday, 26 Jan 2011 | 2:46 PM ETCNBC.com

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Sara Lee may be pushing for a quicker deal than expected, after months of buyout rumors, people familiar with the matter told CNBC. The Downers Grove, Illinois-based packaged food company appears to be weighing bids from two suitors.

AP

Sara Lee

A bid from Blackstone Group and Brazilian meat company JBS could come as early as this Friday, two of these people said.

"A lot of people have been locked in a room for the last few days" trying to hammer out what the details of their offer could look like, another person familiar with the deal said.

Reports have put a price range for the company at between $19 and $21 a share. The deal could involve splitting the company — leaving the meat division to JBS and the coffee group to Blackstone.

Earlier this week talks between Sara Lee and a consortium led by Apollo Management fell quiet because the bid price, reportedly around $18, was too low.

The Apollo team — rounded out by Bain Capital and TPG Capital — planned to borrow around $8 billion, one of these people said. That amount would be more than 5 times Sara Lee's trailing operating earnings of $1.35 billion. Such a deal would represent the largest leveraged finance package in post-Lehman memory.

Bidding for Sara Lee

Things are heating up at Sara Lee, as the company may try to close a deal as early as the end of this week, reports CNBC's Kayla Tausche.

A Blackstone representative declined to comment. Sara Lee did not return calls for comment by press time, people who spoke to CNBC said the company's board was expected to meet in a matter of days.

The company recently halted talks with CEO candidates in order to finalize its large-scale strategy. Sara Lee has been in serious discussions with both internal and external candidates for the rank previously held by Brenda Barnes, who left in July for health reasons.

Barnes was aggressively streamlining the company, selling off underperforming businesses like household and personal care, insecticides, and most recently, the North American bakery division.